Banks lobby for Indonesia Material Transaction rule change

Author: | Published: 24 Nov 2011

Southeast Asia bankers and bankers’ counsel are lobbying the Indonesian regulator to amend the country’s Material Transaction rule.

The Indonesian Capital Markets and Financial Institutions Supervisory Agency ( Bapepam) issued new regulations on Material Transactions in November 2009.

The new rule raised the qualification threshold for material transactions, so that a transaction is deemed material if its value is equal to over 20% of the equity. The definition of the term 'material transaction' includes project participation, asset rental, lending and borrowing of funds, provision of assets as security and provision of company guarantees.

Speaking at IFLR’s Indonesia Forum this week, Jones Day partner Joseph Bauerschmidt said the rule was the single biggest impediment to debt capital market deals in 2011. Lawyers had been working to persuade Indonesia’s regulator to revise its...